Updated about 3 years ago on . Most recent reply
Apartment Complex Investing
I want to start investing in Apartment complexes (6-10 units to start). Our biggest challenge is finding a way to fund this. We know their is a way but wanted to ask the community if they had any advice on getting started. Also, we were wondering what initial steps on starting a business would entail (LLC, Syndication, etc) Any feedback would be fantastic. I am also happy to hop on a call to learn more
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#5 Multi-Family and Apartment Investing Contributor
- Cincinnati, OH
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#5 Multi-Family and Apartment Investing Contributor
- Cincinnati, OH
@Hogan Underhill, getting going is a bit of a chicken and egg. You typically need a deal to truly raise money, and you need money to get a deal. But you can and should talk with an attorney, even at a very high level to understand the legal intricacies. Technically, at least in OH, I can form an LLC and have an EIN within an hour. But having the LLC setup is such a minor overall step. Do you need to do a syndication or is a JV structure adequate? Is the legal setup cost worth the effort for a 6-10 unit property?
What lending requirements will you face? Talk with some lenders. Typically at the 6-10 unit range, assuming you aren't talking Manhattan $1mm/unit prices, you will be dealing with local lenders. What will they require of you as a guarantor? Will they allow multiple guarantors? Will you need a KP to offer up their balance sheet and liquidity? Also, what type of reserves will they require, since those reserves can effect your deal underwriting and overall performance?
The point being, I would talk to some attorneys and lenders. I would talk to your network to gain general interest. I would talk to brokers to understand their deal flow and hopefully to start having them push deals your way.